Bernier sends CRTC to market

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TORONTO -- The federal government on Monday ordered the country's broadcast regulator to rely on market forces above all else when setting telecom policy.

The policy shift toward deregulation comes as the number of candidates to replace Charles Dalfen as head of the Canadian Radio-television and Telecommunications Commission has been winnowed down to two names: former CRTC vice-chairman Fernand Belisle and former phone giant executive George Addy.

Federal industry minister Maxime Bernier, who last month rebuffed the CRTC by rewriting the rules governing local phone competition here, on Monday issued a "policy direction" telling the arms-length phone and TV regulator to "take a more market-based approach to implementing the Telecommunications Act," which governs federal phone policy.

"By issuing the policy direction, we have taken a significant step forward in making Canada's telecommunications regulatory system more modern, flexible and efficient," Bernier said in a statement.

The new direction from Ottawa is significant as Canadian phone giants are locked in a growing fight with domestic cablers and other content carriers to sell and provide bundled TV, phone and Internet services to Canadians.

Forcing the CRTC to deregulate phone policy also follows a tussle in recent months between the regulator and Ottawa.

In September, the CRTC confirmed its decision to regulate voice-over-Internet-protocol (VoIP) phone services, only to have Bernier in November force the regulator to back away from its original conclusion and allow market forces to hold sway.

Then, earlier this month, Bernier overruled the CRTC for the second time in as many months by indicating it will allow telecom giants to set their own local phone rates where competition exists (HR 12/12).

Ottawa's challenge to the CRTC comes as the regulator continues its search for the successor to Charles Dalfen, who ends a six-year reign as CRTC chairman on Dec. 31.

The search has come down to two candidates: Belisle, a former vice chairman of the CRTC and most recently a broadcast consultant, and Addy, currently a lawyer with Davies Ward Phillips & Vineberg and a former senior executive at western Canadian phone giant Telus Corp.

If no replacement for Dalfen is announced by year's end, an interim chairman will be named.